I need to enlarge my exhaust holes from 4" to 4.5". For a 4.5 tail pipe what size hole should I go to? 4 5/8" or 4 3/4"?

Always go with the smaller size first. You can always open the hole up with some sort of sander/grinder, or large half round file if you need a little more clearance. I personally think that hole saws always end up cutting a little bigger than advertised anyway sir.

If you already have a hole there... it is more difficult to use a hole saw again unless you make a plug or something to center the bit. I would draw out your new circle and then die-grinder to it with a large sanding drum. Take your time and mask off the gel coat outside of your cut so that you don't chip it.

I'm going to make a 4" plug, thats easy. Using a grinder to grind out 1/2" of material X 4 would take forever. Good call on the masking though!

I have found if you start by spinning the holesaw backwards till you get through the gel coat it works better.

I would make a plug; and affix it to a small piece of plywood bigger than the plug itself.. Then attach the plywood to the inside of the transom with a couple of temporary screws. Going backwards on the holesaw works pretty well, but do yourself a favor and invest in a NICE holesaw and strong arbor. The cheap stuff they sell at the box stores is worthless for a boat transom.

When I need to enlarge an existing hole, I put one hole saw inside of the other. Put the 4.5" hole saw on the arbor, then screw on the 4". The 4" will hang farther out and act as a guide as you drill through the transom. I use it on exhaust holes, gauge holes, etc. It just has to be a big enough jump in sizes so the smaller one fits inside of the larger one. Usually 1/2" is enough to clear.
Eddie

Great process Eddie, this trumps the plywood as a guide.

+1 on the tail OD +1/2"